Question 1

Q1: "International business is more than international trade". Comment.

Accepted Answer

The statement "International business is more than international trade" is accurate. While people often use the terms interchangeably, international business is a much broader concept that encompasses international trade as just one of its components. International trade specifically refers to the e...

Question 2

Q2: What benefits do firms derive by entering into international business?

Accepted Answer

Firms derive several significant benefits by entering into international business, which often lead to enhanced growth, profitability, and competitiveness. The key benefits are: 1.  Prospects for Higher Profits: International business can be more profitable than domestic business. Firms can earn hig...

Question 3

Q3: In what ways is exporting a better way of entering international markets than setting up wholly owned subsidiaries abroad.

Accepted Answer

Exporting is often considered a better initial way of entering international markets compared to setting up wholly owned subsidiaries, especially for small and medium-sized firms or those new to global business. The advantages of exporting over establishing a wholly owned subsidiary are primarily re...

Question 4

Q4: Rekha Garments has received an order to export 2000 men's trousers to Swift Imports Ltd., located in Australia. Discuss the procedure that Rekha Garme...

Accepted Answer

To execute the export order for 2000 men's trousers to Swift Imports Ltd. in Australia, Rekha Garments would need to follow a systematic export procedure. The key steps involved are: 1.  Assess Importer's Creditworthiness and Secure Payment: Since the order is already received, the first step is to...

Question 5

Q5: Your firm is planning to import textile machinery from Canada. Describe the procedure involved in importing.

Accepted Answer

If my firm plans to import textile machinery from Canada, it would need to follow a series of steps to ensure the transaction is completed legally and efficiently. The import procedure would be as follows: 1.  Trade Enquiry: The first step is to identify potential suppliers in Canada and send them a...

Question 6

Q6: What is IMF? Discuss its various objectives and functions.

Accepted Answer

The information required to provide a detailed answer on the objectives and functions of the International Monetary Fund (IMF) is not available in the provided source text. The text mentions the IMF only in the context of India approaching it in 1991 to manage its balance of payment crisis, which le...

Question 7

Q7: Write a detailed note on features, structure, objectives and functioning of WTO.

Accepted Answer

The information required to write a detailed note on the features, structure, objectives, and functioning of the World Trade Organisation (WTO) is not available in the provided source text. The text only mentions the WTO as a contributory factor to increased interactions and business relations among...

Question 8

Q1: Differentiate between international trade and international business.

Accepted Answer

International trade and international business are related but distinct concepts. The key differences are as follows:    Scope: International business is a much broader term than international trade. International trade, which involves the export and import of tangible goods (also known as merchandi...

Question 9

Q2: Discuss any three advantages of international business.

Accepted Answer

Three major advantages of international business are: 1.  Earning of Foreign Exchange (Benefit to Nation): International business helps a country earn valuable foreign exchange. This foreign currency is essential for importing capital goods, advanced technology, petroleum products, and other essenti...

Question 10

Q3: What is the major reason underlying trade between nations?

Accepted Answer

The major reason underlying trade between nations is that countries cannot produce all the goods and services they need equally well or cheaply. This is due to the unequal distribution of natural resources and differences in productivity levels among them. Key factors contributing to this are:    Un...

Question 11

Q4: Differentiate between contract manufacturing and setting up wholly owned production subsidiary abroad.

Accepted Answer

Question 12

Q5: Why is it necessary for an export firm to go in for pre-shipment inspection?

Accepted Answer

It is necessary for an export firm to go in for pre-shipment inspection for the following reasons:    Quality Assurance: The primary purpose of pre-shipment inspection is to ensure that only good quality products are exported from the country. This helps in maintaining the reputation of both the exp...

Question 13

Q6: What is bill of lading? How does it differ from bill of entry?

Accepted Answer

A bill of lading is a crucial document in export transactions. It is issued by the shipping company or its agent to the exporter after the goods have been loaded onto the ship. It serves three main purposes: 1.  It is an official receipt confirming that the shipping company has accepted the goods fo...

Question 14

Q7: What is a letter of credit? Why does an exporter need this document?

Accepted Answer

A letter of credit (L/C) is a guarantee issued by the importer's bank, in which the bank undertakes to honour payment up to a certain amount of export bills to the exporter's bank. It is a commitment by the bank on behalf of the buyer (importer) that payment will be made to the seller (exporter), pr...

Question 15

Q8: Discuss the process involved in securing payment for exports.

Accepted Answer

The process of securing payment for exports is a critical final step in an export transaction. It typically involves the following stages: 1.  Preparation of Documents: After the shipment of goods, the exporter prepares an invoice and collects all other necessary documents required by the importer t...

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